Stiglitz says that Argentina's problems began (apparently out of nowhere) with hyperinflation in the 1980s. I am not an expert on Argentina, but I would argue that the cause of the hyperinflation needs to be understood rather than being taken as a starting point.
Wasn't it the military junta that took over 1978 that mismanaged the economy in the first place? In 1978, the Argentinean economy had a surplus in the current account, and the fiscal deficit had been reduced by approx. $10 billion over four years and the external debt was manageable at around $12 billion. Admittedly inflation was high at 175% a year, but this was nowhere near hyperinflation, and output was sagging. But it was during the 1980 interregnum when General Viola replaced President Videla that the exchange rate policy began to spin out of control. As the attempts by the military junta to stimulate the economy failed, there were two major currency devaluations (10 percent in February 1981 and 23 percent in March 1981). As speculation continued throughout the summer of 1981, the economy became destabilized.
The point is simply this, while military regimes may be good at enforcing austerity, they are not particularly adept at stimulating economies. The fact that the Alfonsin and Menem governments had such a difficult time reigning in the deficit, warding off commercial bankers, and reducing inflation should not be blamed (implicitly or explicitly) on the weakness of democratic regimes. And to the credit of the Menem's administration, it did implement a very serious package of reforms that (at least temporarily) set Argentina back on the path toward a stable economy.
Much more important than the blame game between the IMF and Argentina is the implicit blame game between democratic and authoritarian forms of government. I hope that the lesson learned from Argentina's crisis is not a secret longing for authoritarianism.
Vikash Yadav Philadelphia, PA